How a Gentrification Scam Threatens New York’s Community Gardens

October 20, 2015

It’s June in New York City—a humid late afternoon—and a dozen neighbors are gathered just outside the community garden they care for at 237 Maple Street, in the Brooklyn neighborhood of Prospect-Lefferts Gardens. They sit in folding chairs in the street, wedged between the bike lane and the sidewalk, because they are not allowed to enter the garden. Just the day before, the Supreme Court of New York issued a restraining order to keep them out. Everyone looks damp and, deflated by the news, they sink into their seats.

An audio version of this story aired on WNYC's Morning Edition on Nov. 22. The Nation and WNYC are partnering to cover development and displacement in New York.

The Maple Street Community Garden sits on a patch of earth where the home of Oscar and Germaine Kirton once stood. The Kirtons were both deceased by 1990; with no known will or immediate heirs, their house fell into disrepair; it burned down in 1997. For 15 years thereafter, the empty lot at 237 Maple Street was a repository for junk and trash—not only wasted space but an eyesore. Eventually, the block association decided to do something with the unused land.

One block-association member, Cameron Page, searched public records to find the property’s listed owner: Housing Urban Development LLC—notably, not the federal housing agency with a nearly identical name, but rather a private corporation. When Page called the number listed for the company in October 2012, the person who answered refused to discuss the property. Page then sought guidance from 596 Acres, a nonprofit organization that had mapped all the vacant land in New York City in 2011 and has encouraged people to make use of the spaces in their neighborhoods.

The block association got a $1,000 grant from a local nonprofit to clean up the lot and started planting food for a community garden. The office of City Councilman Mathieu Eugene allocated another $4,800. Over the next year, the garden became central to the diverse neighborhood that cared for it.

Tim Webster and Kate DiGerolamo’s 15-month-old son, Maurice, took some of his earliest steps under the 100-year-old elm tree that anchors the lot. “I’d bring him here every day,” Webster says. Sixty-nine-year-old Earl Bonus planted callaloo and Scotch bonnet peppers—­just the right ingredients for dishes that remind him of his Trinidadian roots. Bob and Nancy Treuber live just one door up, so they let neighbors working in the garden use their bathroom. The community built the garden, but perhaps it is more accurate to say that the garden built a community.

Listen to WNYC's audio version of the story, part of a Nation partnership to cover development and displacement.

This sort of thing has been going on in New York since the 1970s, when a garden movement emerged after decades of urban-renewal projects that, in many cases, went unrealized. “Slums” were cleared, but the promised parks and housing never materialized. Vacant lots of public land dotted the streets in any given neighborhood. But by 1973, the late community organizer Liz Christy had founded the Green Guerillas, a group that still thrives today. They got their start throwing “seed bombs”—packets of fertilizer, seeds, and water—over the fences of vacant lots in the East Village.

The fight for gardens grew throughout the squatter scene of the 1980s and ’90s. The anarchists and punks and hippies from various squats not only built the stone terrace at La Plaza Cultural, a now-­famous institutional garden in the East Village, but also grew food there, fed the homeless, hosted concerts, stopped the bulldozers. The work of the Green Guerillas, squatters, and myriad groups spread to other neighborhoods, and now there are over 600 community gardens in New York.

Today, these cultivated spaces are deeply meaningful for two quite distinct groups: those who live within a few blocks of them, and those looking to make a quick buck in the global real-estate gold rush.

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In 2014, there was $26.1 billion in new construction in New York City, up 31 percent from the year before. In Brooklyn, the hottest section of the market, sale prices are up 18 percent from July of last year. Throw a rock in the borough and you’ll hit a construction site.

Gardens are particularly attractive targets for developers because they are, essentially, construction-ready addresses that don’t require the messy business of moving people out of their home. Even more to the point, their unique political roots make them vulnerable to the harassment and fraud that have come to define the real-estate market.

There are, broadly, two types of community gardens today. Some sit on city-owned land and began as an agreement between the gardeners and the government, albeit one that comes with a huge caveat: The public can use the space, but it must leave when the city decides to sell or develop the land. Other gardens, like the one on Maple Street, owe their existence to the movement’s successful guerrilla tactics. They may have the hard-won support of government officials, but the land in use is not city-owned; instead, it might be abandoned, tied up in a court battle, or simply neglected for many years. Most of these gardens face trouble in a particular circumstance: if someone shows up making a claim of ownership for the property.

Much like the housing bubble that sparked the Great Recession, the Brooklyn real-estate market is rife with crime, as developers at all levels snatch at quick profits in once-poor neighborhoods. Deed fraud—in which someone fakes documents to illegally claim ownership of a property—is one of the most acute problems.

New York City Sheriff Joseph Fucito says his office was aware of nearly 1,000 possible cases of deed fraud as of August 2015. State regulatory officials, who are overwhelmed by the sheer volume of transactions in the market, suspect that number is a fraction of the actual tally. “No one is talking about it, but we’re seeing this every day,” says Sonia Alleyne, press secretary for the New York Department of Finance, which is the agency that processes property deeds for the state. “I don’t think anyone realizes how big this story is.”

* * *

“We’re seeing this every day. I don’t think anyone realizes how big this story is.”

In late summer 2014, after nearly two years of silence, Michael and Joseph Makhani appeared at 237 Maple Street claiming ownership of the land. They are principals in Housing Urban Development LLC. First it was just the two of them. They ripped down garden signs attached to the fence at the front of the property and, according to affidavits, warned the gardeners who were present, “You’ll leave when the backhoes get here.”

The next morning, a moving truck pulled up and a crew emerged. The men went right to work, ripping up a vegetable bed. Nancy Treuber rushed to the scene, as did several others. “Moms, kids—word got out, and members left work to meet on the sidewalk in front of the garden,” she recalls. They milled about, unsure what to do, yet certain that their presence mattered. Treuber pulled out her phone and filmed the action. Her voice is heard off camera, calm but loud: “You are vandalizing the property, please do not do that.” The crew ignores her, continuing with their work.

One of the gardeners called the cops. They arrived within minutes, as did the Makhanis. The cops told the Makhanis to come back with a court order, and so the legal battle began. Three months later, the Makhanis filed applications with the city to construct a five-story, 17-unit luxury-condo building on the lot. Their applications are still pending.

The Makhanis have produced a deed that shows they acquired the property in 2003 from Alan and Alexander Kirton—who they claim were nephews of the deceased owners—for just $5,000. The hypermodest purchase price is itself suspicious, but the Makhanis’ deed also has numerous irregularities: The notary’s signature is illegible, and his or her name and license number are missing from the copies filed with the court; the notary misspelled the city (“Worchester” instead of “Worcester”) and state (“Massachusets” instead of “Massachusetts”) where the deed was ostensibly recorded; and the Social Security number provided for Alexander Kirton, whose signature appears throughout the documents, belongs to someone else. “He doesn’t exist,” says Paula Segal, the lawyer representing the gardeners. “Or he’s using someone else’s Social Security number. Either way, it’s a problem.”

The deed isn’t the only bit of questionable paperwork. When Housing Urban Development applied to begin construction on its luxury-condo building, the application was submitted under the name Mike McKany. This is, one can assume, Michael Makhani, but spelling variations can make it harder to match disparate public records and, thus, easier to avoid scrutiny.

* * *

Michael and Joseph Makhani are brothers who together operate several limited-liability companies (LLCs) involved in housing. They have a long record in the sordid history of real-estate bubbles over the past 20 years.

In 1998, Joseph Makhani was sentenced to three months in prison for rigging bids at foreclosure auctions; he was also convicted of filing false deeds in Queens. In the years leading up to the foreclosure crisis, the Makhanis used Housing Urban Development to sell subprime mortgages in low-income neighborhoods throughout Brooklyn. Their deceptive practices are documented in a 2008 student film, Subprimed, in which the filmmakers call the Makhanis to ask about their corporation’s misleading name. Joseph Makhani certainly doesn’t dodge the question: “If the client is stupid, that’s not my problem. We’re not going to have classes to teach people how to read.”

While investigating other claims that the Makhanis have made on properties throughout New York, Segal came in contact with a lawyer named Marisa Falero. In 2009, Falero was appointed to evaluate the estate of an elderly property owner named Queen Dobbins. When Dobbins died, Falero put the Harlem building she owned up for sale on behalf of her estate. When the residential building went on the market, a man named John Zi came forward and claimed he already owned it. He produced a contract for sale showing that he had acquired the building from a woman named Virginia Kelley, a longtime friend of Dobbins who Zi claimed had an ownership stake.

Falero knew Zi was lying: Kelley did not exist in the ownership papers. But when she went to Dobbins’s former apartment to retrieve the documents, they were gone. “They had been in her apartment,” Falero says. “They took everything of importance out.” On behalf of the estate, she asked the court to invalidate Zi’s deed immediately. “They showed up in front of the judge, and the little old lady couldn’t form a sentence,” she says of the frail Kelley.

Eventually, Zi was indicted for five instances of deed fraud, thanks in part to recordings obtained by Falero in which Zi admits to stealing documents from Queen Dobbins—and identifies the Makhanis as his partners. In one conversation, Zi can be heard describing a scheme organized by the Makhanis to “hijack” titles throughout the city. And yet the Makhanis are still in the real-estate business today. Segal created a database of 99 properties associated with them since 2001, as well as a network of LLCs supposedly doing business out of the same address on file for Housing Urban Development. It’s from this address that the Makhanis have sent out teams of lawyers to file cases against the Maple Street gardeners.

They started in the New York State Supreme Court in March 2014, where they filed a lawsuit asking the court to validate their deed. The second case is in civil court, where the Makhanis have also filed eviction proceedings. It’s a war of attrition, in which various motions are crammed into two separate cases in two separate courts, each providing the Makhanis a different route to the same goal: getting community gardens out and building luxury condos in their place.

* * *

It’s now a hot July morning, and Paula Segal is at the courthouse, again, for both 237 Maple Street and another community garden she’s representing in the neighborhood. TYC Realty claims it acquired the second garden’s lot for $10 from a man in Florida. Both gardens have court dates scheduled, coincidentally, on the same morning.

“The guys we’re dealing with have perfected the method of manipulating every weakness.”

Segal emerges from the elevator on the sixth floor of Housing Court looking bleary-eyed and tense after preparing two legal arguments the previous night. For days, she’s been entreating gardeners from both locations to join her in court, knowing their presence will help demonstrate their dedication to the gardens. They did not disappoint her: Segal enters the courtroom with 18 others, all wearing T-shirts with the names of their respective gardens, all sharing a buzz of anticipation.

But after an hour of waiting, it becomes clear to the gardeners that the case will not be resolved today. They’ll have to wait and fight another day. Segal herds everyone back into the hallway and finds herself surrounded by the long faces of people who have taken off work to be there. The buzz is gone; the T-shirts are coming off.

Segal forces a smile and says that everyone will have to come back and try again. And maybe another time after that, and perhaps another. One gardener tells Segal she can’t miss any more work and doesn’t know how much fight she has left in her. Segal cuts her off to remind everyone that she is working for free. The gardeners collect small dues that help cover court fees, but Segal is not expecting any payment for her services. There’s tension in the air—the tension of a large group of people at the end of a very short rope.

“You can become demoralized pretty quickly,” says Bob Treuber, who is 63 and moved to Maple Street in 2012, just as the garden was starting up. “The guys we’re dealing with have a history, and they have perfected the method of manipulating every flaw and weakness and inefficiency within the city’s bureaucracy.”

These manipulations of the system have come to feel inevitable in any booming real-estate market—a gold rush creates chaos, and chaos creates opportunity. But they are no longer mere quirks of the market; they are, increasingly, its defining characteristics. High points in our country’s housing economy are routinely marked by endemic harassment and fraud, often in the poorest neighborhoods.

Think of the illicit and predatory practices that have been documented in the decade since the subprime-mortgage marketplace crested. It’s now well established that nonwhites were disproportionately targeted, that mortgage applicants were encouraged to provide false or misleading financial information, and that company executives allowed “robo-signing” junior associates to issue endless batches of mortgage paperwork without ever looking at them. Our country’s housing markets seem to require these practices in order to function as we’ve come to know them: cyclically, predictably racing to some new zenith of growth. So now Brooklyn is a boomtown, and harassment and fraud are thriving.

* * *

On a Sunday afternoon, a few weeks after their disappointing day in Housing Court, a group of Maple Street organizers enter their garden and sit in a circle under the shade of the elm tree. Two days earlier, a Housing Court judge temporarily lifted the Supreme Court’s restraining order. There is a mix of joy and anxiety. Bob Treuber has brought a clipboard. “I’ve been trying to get people in the neighborhood to sign a petition saying we don’t want to see this thing go away,” he says. “I see a lot of people when I come home from work at night, and it’s, you know, that nodding-glancing thing—and now we’re having introductions, conversations and names.” Earl Bonus rallies his fellow gardeners: “Let’s keep fighting. Are you fired up? Ready to go.” The last sentence, a riff on President Obama’s famous exhortation, might be a question or a statement or both.

When I called the Makhanis’ listed number to ask about the Maple Street garden and the John Zi indictment, a man identifying himself as Michael Makhani said he’d never heard of Zi. “I have no idea what you’re talking about,” he insisted at first, before saying that he “might” have heard the name but had never done business with the man. He hung up before I could mention Maple Street.

Sonia Alleyne at the state Department of Finance says that Commissioner Jacques Jiha is looking for remedies for the broader deed-fraud crisis, mostly by tightening the filing rules. “We made recent changes to LLC disclosures, and now we’re also introducing some legislative changes around the notaries.” Meanwhile, Sheriff Fucito says he knows of 15 deed-fraud arrests in the last year. That number is dwarfed by the more than 1,000 leads and 125 criminal investigations and, just beyond those, a literally uncounted number of unexamined deed transfers.

“The problem is this open process that allows people to just walk in and file false instruments,” says Christie Peale, executive director of the Center for New York City Neighborhoods, an organization that studies deed and mortgage fraud. The Department of Finance has strikingly basic standards for accepting deed paperwork: As long as the documents are in “recordable form”—that is, completed—they are processed. “That has to change,” Peale adds, “because right now the Department of Finance doesn’t have a comprehensive approach to picking out problematic documents before they are accepted for processing.”

* * *

October 13, Paula Segal and the Maple Street gardeners finally return to State Supreme Court. The sun is shining and it feels like summer. Judge Mark I. Partnow asks Segal and Philip Simpson, counsel for the Makhanis, to discuss the case in his chambers. One can only assume he doesn’t want to have the discussion in front of the row of gardeners anchored to the first bench of the gallery, uniformly clad in Maple Street T-shirts.

Segal emerges from the meeting and reports mostly positive news: The judge took special note of the fact that the Appellate Court stayed his temporary restraining order from earlier in the summer, and he questioned why the Makhanis have filed different cases in different courts. He asked Segal to submit one last reply to the most recent motion. The fight is almost certain to carry into 2016. The gardeners are gearing up for a long winter.

DW GibsonDW Gibson is author of the recently published book The Edge Becomes the Center: An Oral History of Gentrification in the Twenty-First Century.